The main tax exemptions and financial advantages in the Canary Islands
The Canary Islands Special Zone (ZEC), the low tax zone, offers very advantageous financial and fiscal conditions to companies favouring the creation of quality jobs as well as the economic and social development of all the islands in the archipelago. Operating within the European legal framework, the low tax zone offers a sort of tax haven for companies wishing to expand their activities.
Some conditions to become a ZEC entity:
- It must be a newly created entity with its registered office and place of management.
- At least one member of the management must reside in the Canary Islands
- The company must make a minimum investment of €100,000 (in the case of Gran Canaria and Tenerife) or €50,000 (in the case of La Gomera, El Hierro, La Palma, Fuerteventura or Lanzarote) in fixed assets related to the activity during the first two years.
- It must create between 3 and 5 jobs minimum (5 if in the capital islands), within 6 years of creation. The employment rate must be maintained throughout the existence of the company in the ZEC.
Tax advantages for ZEC entities:
- Income Tax Nonresident (IRNR) exemption
- Property Transfer Tax and Stamp Duty (ITP-AJD)
- Canary Islands General Indirect Tax (IGIC)
- Compatibility with other REF tax incentives